MW: Dollar mostly lower, euro choppy amid Greece uncertainty
By William L. Watts & Lisa Twaronite, MarketWatch
LONDON (MarketWatch) -- The U.S. dollar was mostly lower versus major rivals, while the euro saw choppy trade amid uncertainty over prospects for a financial backstop from its European Union partners.
A report in Germany's Der Spiegel magazine over the weekend and in the Financial Times Deutschland on Monday said Germany was working with its European Union partners on a package of guarantees and loans worth around 20 billion to 25 billion euros ($27 billion to $33.8 billion).
A European Union spokesperson denied on Monday that any aid package was in the works, saying Greece had not made a request, Reuters reported. Read about Greece.
"It's still not clear to me what they're going to do when the worst comes to happen and investor confidence does evaporate again ... I think the ECB and the E.U. are still very unclear about what the assistance could look like. And I think that is something that is weighing on the market," said Kenneth Broux, market economist at Lloyds TSB.
The euro was slightly higher versus the U.S. dollar at $1.3615, compared with $1.3603 in North American trade late Friday.
The dollar index (DXY 80.44, -0.10, -0.12%) , which measures the U.S. unit against a trade-weighted basket of six major currencies, slipped slightly to 80.589 from 80.627 late Friday.
The dollar edged down to 91.32 yen, from 91.65 yen in late North American trading on Friday.
Currency strategists said testimony Wednesday and Thursday by U.S. Federal Reserve Chairman Ben Bernanke could set the tone for the greenback.
"This week, how [U.S. Federal Reserve Chairman Ben] Bernanke's Congressional testimony for the semiannual monetary policy report on Wednesday will affect U.S. rate expectations should likely be key" to how the U.S. dollar fares against its Japanese counterpart, said Tomoko Fujii, a rates and currency strategist at Bank of America Securities-Merrill Lynch, in a note to clients Monday.
If Bernanke's statements "discourage expectations of early monetary tightening" -- as Fujii said she expected them to do -- the dollar "will probably become top heavy again" against the yen.
The dollar touched an eight-month high against major currencies Friday, supported by the Federal Reserve's surprise move to increase its discount rate. See Friday's Currencies report.
